The Nairobi Securities Exchange (NSE), officially launched its Unquoted Securities Platform (USP), a market infrastructure that facilitates the trading, clearing and settlement of securities of unquoted companies in Kenya. This development is part of NSE’s ongoing initiatives to ensure our market is able to facilitate the trading and clearing of all financial market transactions conducted in our market.
These significant improvements in NSE’s infrastructure are key and underscore the Company’s commitment to offer best-in-class technology capabilities to support easier trading and execution of transactions in our market.
Geoffrey Odundo, CEO, NSE: “There has been substantial growth in the number of securities trading over the counter. Most involve leading securities of well-developed companies across various sectors of the economy including commercial banks and insurance companies, co-operative societies, leading private companies among many more. Equally, the last few years have witnessed an increase in the number of companies raising long term initial and ongoing equity and debt capital through private placements.”
The automated USP solution offers numerous advantages that companies can explore as they pursue capital raising and price discovery while offering an easier transfer platform for investors. Investors enjoy a reduction of settlement delays and the system allows surveillance by the Exchange and the Regulator, thereby protecting investors in the market.
The register of investors is managed by an independent registrar protecting the register from possible manipulation. Additionally, the platform eliminates possibilities of human error associated with manual processing. For issuers, the platform provides access to capital and an introduction to capital market transactions easing their possible transition into the main quoted market.
Wyckliffe Shamiah, Chairman, CMA: “With regards to innovation, the Authority consistently seeks to provide a conducive policy and regulatory environment for the deployment of new and innovative ideas, including FinTech and business models that have the potential to deepen capital markets in Kenya. Through the CMA Regulatory sandbox, new innovations continue to be rolled out into the market and the impact is slowly but surely showing.”
Early this year, Acorn Holdings Ltd quoted its Income and Development Real Estate Investments Trusts on the USP, making Acorn the first company to tap into the market infrastructure for the trading of shares of unquoted companies.
Edward Kirathe, CEO, Acorn Holdings: “Acorn Holdings Limited is delighted to tap into Kenya’s capital market to unlock growth opportunities as it seeks to grow its impact in Purpose Built Student Accommodation space.”